The board of GlaxoSmithKline (GSK) Consumer Nigeria Plc has announced its decision to cease operations in the country
This conclusion was issued in a statement by the board who acknowledged there would be many questions from shareholders and stakeholders, assuring them ceaseless work is being put into to address concerns. As such, the company is working with professional advisors to agree on next steps and indicated it will shortly be submitting a draft Scheme of Arrangement to the Securities and Exchange Commission. This will see shareholders other than GSK UK, receive an accelerated cash distribution and return of capital (if approved).
The board provided the reasons that this decision was ultimately taken, indicating the GSK UK Group had informed GSK Nigeria of its strategic intent to cease commercialisation of its prescription medicines and vaccines in Nigeria through the GSK local operating companies and transition to a third-party direct distribution model for its pharmaceutical products.
In addition, the statement noted that the Haleon Group had separately informed the board of its intent to terminate its distribution agreement in the coming months and to appoint a third-party distributor in Nigeria for the supply of its consumer healthcare products. It was in light of these developments that the board concluded there were no alternatives left available but to cease operations.
The release stated, “Today we are briefing our employees whom we will treat fairly, respectfully and with care, meeting all applicable legal and consultation requirements… Shareholders are advised to seek professional advice and continue to exercise caution when dealing in the company's shares until a further announcement is made.”